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The British Pound Is Showing Signs Of Volatility For No Real Reason

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The British Pound Is Showing Signs Of Volatility For No Real Reason

The United Kingdom is about to embark in a new era as "Article 50" is expected to be triggered by the end of the month, which launches the official Brexit process. The article gives the European Union official notice that the country will be leaving the organization, so naturally the national currency will experience signs of volatility when notable events occur.

But over the past two days, the currency has been acting volatile on no new developments. According to a Bloomberg report, the British pound was trading less than 0.2 percent higher against the dollar at 6 a.m. London time. Within 10 minutes, the currency soared higher in a straight line on very heavy volume and added as much as 0.7 percent to its gains.

The curious part of this story is that the same volatile move occurred just one day before. The pound was trading in a normal range Tuesday morning, but suddenly spiked lower and lost 0.3 percent against the dollar in just six minutes.

Bloomberg noted there was no notable news releases to support the moves on either Tuesday or Wednesday. While there could be some explanations for the moves, including traders routing orders at a specific time, lower than usual liquidity and algorithm-based systems placing additional orders after the initial move lower or higher.

See Also:

The British Pound Is Trading At A 7-Week Low, And Some Analysts See Further Downside

Pound Woes Could Be Good News For These U.K. ETFs

Posted-In: Article 50 Brexit british pound European UnionEurozone Forex Markets Media Best of Benzinga

 

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